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Is the convergence of business cycles a global or regional issue? The UK, US and Euroland

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  • Andrew Hughes Hallett
  • Christian Richter

    (Loughborough University, UK)

Abstract

The identification of an European business cycle has been inconclusive. Yet cyclical convergence is the key consideration for those countries that wish to be members of the currency union (e.g. UK). In general, countries will vary in the components and characteristics that make up their cycles at any moment, as well as in the state of their cycle at each moment. To take this into account, we show here how to decompose a business cycle in a time-frequency framework; so that its components vary in importance and cyclical characteristics over time. We show, the inconclusive convergence results obtained so far appear because countries have some cycles in common-but diverge at others. Copyright © 2006 John Wiley & Sons, Ltd.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal International Journal of Finance & Economics.

Volume (Year): 11 (2006)
Issue (Month): 3 ()
Pages: 177-194

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Handle: RePEc:ijf:ijfiec:v:11:y:2006:i:3:p:177-194

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Cited by:
  1. Andrew Hughes Hallett & Christian Richter, 2009. "Is the US no longer the economy of first resort? Changing economic relationships in the Asia-Pacific region," International Economics and Economic Policy, Springer, vol. 6(2), pages 207-234, July.
  2. Andrew Hughes Hallett & Christian Richter, 2008. "Have the Eurozone economies converged on a common European cycle?," International Economics and Economic Policy, Springer, vol. 5(1), pages 71-101, July.
  3. Andrew Hallett & Christian Richter, 2006. "Measuring the Degree of Convergence among European Business Cycles," Computational Economics, Society for Computational Economics, vol. 27(2), pages 229-259, May.
  4. Crowley, Patrick, 2008. "One Money, Several Cycles? Evaluation of European business cycles using model-based cluster analysis," Research Discussion Papers 3/2008, Bank of Finland.
  5. Maria do Rosario Correia & Reinhard Neck & Theodore Panagiotidis & Christian Richter, 2008. "An empirical investigation of the sustainability of the public deficit in Portugal," International Economics and Economic Policy, Springer, vol. 5(1), pages 209-223, July.
  6. Andrew Hughes Hallett & Christian Richter, 2009. "Has there been any structural convergence in the transmission of European monetary policies?," International Economics and Economic Policy, Springer, vol. 6(2), pages 85-101, July.

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